On July 1, 2013 the Massachusetts legislature passed a bill repealing the Massachusetts Healthcare Reform Act’s employer Fair Share Contribution requirement. Under the requirement, an employer that did not make a “fair and reasonable” premium contribution toward the health insurance cost of its Massachusetts employees was required to pay a “Fair Share Contribution” to the Massachusetts Department of Labor. Annual Fair Share assessments of $295 per full-time equivalent employee applied to employers of 11 or more full-time equivalent employees who were employed in Massachusetts.
Governor Deval Patrick sponsored the bill calling for the repeal of the Fair Share Contribution requirement in part due to the fact that the Affordable Care Act’s similar employer mandate would make compliance with both employer mandates onerous for Massachusetts employers and could result in duplicative penalties.
However, in a surprise announcement by a U.S. Treasury Department official on July 2nd, the federal government stated that the implementation of the Affordable Care Act’s employer mandate would be delayed a year, until January 1, 2015. The repeal of the Fair Share Contribution in Massachusetts resulted in a short window — between July 2013 and January 2014 — during which penalties for failing to provide insurance were eliminated. With the postponement of the Affordable Care Act’s employer mandate, that period now stretches for 18 months, until January 2015.
Discussing his decision not to veto the Massachusetts legislation despite the Affordable Care Act’s delay in implementing the employer mandate, Governor Patrick expressed his belief that Massachusetts employers will continue to offer health insurance until the federal employer mandate’s new effective date.
The State has instructed employers that the last filing period for the Fair Share Contribution will be from April 1, 2013 to June 30, 2013 and will be due August 15, 2013. Employers are still required to file for all outstanding periods for which they were sent a Fair Share Contribution Notice to File. Payment is expected in full for any liability incurred, with ACH debit continuing to be the standard method of payment. Appeals will continue to be processed and hearings will be scheduled and conducted as normal.